Can I get Student Loan With Bad Credit: Options for Bad or Poor Credit
Education loan is one of the excellent aids designed to help students afford their Higher Education. Such loans have a lower rate of interest and flexible repayment terms which further enable students to repay the loan amount with ease. A student loan is generally granted on behalf of their parents’ CIBIL score. Thus it is really important that parents need to have a really good CIBIL score in order to obtain a loan for their child’s career.
What is Credit Score or CIBIL?
The Credit Information Bureau India Limited (CIBIL) is an organization that provides score and credit reports pertaining to an individual. It is a representation of an individual’s creditworthiness. A good credit score is important as it will help the individual to obtain a loan for oneself.
How can the CIBIL score affect your Education loan approval?
At an average, 95% of the loans are accepted in case you have a CIBIL score above 750. The perks of having a good credit score:
Lower rate of interest
Higher loan amount
Quicker approval
In case you have a low CIBIL score, you might receive a loan from the bank but with higher rates of interest. Below listed are a few options in such a situation:
Collateral: The bank might accept collateral in case you have a low credit score. This might also help to lower the individual’s interest rates on the loan.
NBFCs: The non-banking financial companies do lend loans to individuals with low credit score without the requirement of any collateral but at comparatively higher interest rates.
You can also list out the reasons for your low credit score. The bank might consider your reasons in case it finds it to be genuine enough.
In case you want Student loans with bad credit, you can find a co-signer with excellent CIBIL score in order for the bank to consider the loan approval. Thus, it is important to maintain a good CIBIL score in order to obtain an Education loan easily at a lower interest rate.
